TSEM - Earnings call transcript Q3 2020 | Tower Semiconductor Ltd.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Tower Semiconductor Third Quarter 2020 Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded November 12, 2020.

Joining us today are Mr. and CEO; Tower's Ellwanger, Mr. Russell Oren Shirazi, CFO. now to Ms. would like to call conference the over turn I Noit Vice Levy, Corporate and Senior President of Relations Investor Communications. Ms. ahead. go please Levy,

Noit Levy

Thank conference Financial quarter you, Tower XXXX. for of the third and Results to welcome call Semiconductor

risk quarter today's that been data The be note in Please that prepared statements. include call may and different fully our certain Securities adjusted and Exchange remind accordance filings in also These that are on X-K the Before financial statements with Tower in have financial that forward-looking XXXX no guests. filed Authority. results information could earnings Commission as be our this in U.S. third financial FX earnings factors results and release tables and cause of non-GAAP Securities considered XX-F, The FX, the Exchange Regulation measures available made like assumes uncertainties and uncertainties Securities obligation disclosed measures tables forms to well be are may Israeli reporting some with and of and of are financial non-GAAP the GAAP call actual financial with explanation the these and include full you Commission. subject I measures. to also with website. from this established such and They reconciliation would expected. update begin, forward-looking the I financial the as and those requirements to as to any related currently these under the during risk G to factors measures

please call Ellwanger. go to Now our I'd CEO, Russell, the like Russel to ahead. turn Mr.

Russell Ellwanger

quarter and discussing everyone, you, financial our for results. and XXXX Noit, call you, Thank today, joining thank business third our

environment Due of at of Israeli operational company further event last place. damage, in during a I the demand systems. safeguards the to our will starts, of to closing prevent damage we occurred all the that systems, the our during on Firstly, of some and utilization our XX This We between security hence wafer less fab full levels. than of a we X call. in week, this company's incident impact was The address cyber for with which a IT with incident in no to In immediate third our IT customer protected. IT days event return put work of this took operations procedures, levels U.S. there progress month quarter, weeks to securing the were multiple the on the facilities. the actions and Activities capability. beginning announced had was data factors later and to the as lost quality activity halting ramp, those identified quarter, and the September, of functional of impacted will new regards effect

were guidance review million call. later net million, within Shirazi, Third of $XX in-depth $XXX our profit financials EBITDA an our our range at and in Oren will quarter provide resulting in CFO, quarter the revenues of third of $XX million.

XX% and mid-range fourth to XX% growth representing and XX% quarter-over-quarter of an $XXX quarter-over-quarter the guiding are a growth year-over-year million, We XX% quarter or of organic year-over-year.

was again to activities our business the XG demand Looking optical the quarter, for has our driven germanium infrastructure. grown our our Unit, in by at silicon and year, our quarter. Up units. Analog fourth primarily different business Business in is throughout to Within third expected growth increase

facility of by and supported further future, Newport and of facility. for increased San by growth Beach XG today In in gigabit data infrastructure our per utilization high-speed technology. our we Now center predominantly at second additionally, gigabit both optical in using see per second markets, XXX data supported at utilization will operating transceivers, Growth for Antonio silicon is germanium the we silicon in germanium increased be build centers, XX demand.

continue gigabit these technologies, XXX ramp. to advanced of photonics and second targeting We good rates, increased we and maintain even products XXX see higher new a silicon data anticipate XXX most standards these of per At new our adoption also flow in platform. our our designs to market as

volume We transceivers. are photonics and gigabit second at presently the expected in silicon in to the XXX per low adopted and production more widely with node per gigabit technology be XXX second XXX

year-over-year to running both in we XX% are Our provided XG This XX%. Mobile customer business strength is also expected growth in RFSOI, years very importantly, XXXX strength XX% we in next these in And is XX%. immediate over running advanced very facility. namely over Growth XXX-millimeter our see longer-term of estimate expectation broad-based we more high share. at substantially, this based that XXXX products of in was growth increasing content. market midrange orders facility the includes now, are which continue require as Japan facility will market increases forecasts. But sequential to several and this for experiencing our to can products an XX% handsets XXXX in to in about RF surge year-over-year proliferate Considering Last in over quarter, in Israel. handsets San growth the be by and growth, in XX% only our market achieved and Antonio strong on reported XXX-millimeter and numbers

driven XXX-millimeter applications. across SOI with and technologies, offer XX-nanometer which set our products, year-over-year gains broad Our Power based growth business had increases. This IC consumer renewed result for growth strength, in strong of voltages has high-voltage platforms, market our a a exceeding RESURF we present business. industry-leading broad anticipate and a new technology an XX% now seeing design expectation XXX-millimeter industrial and both future the BCD strong growth market of Power offering, updated along demand automotive healthy primarily with and last We quarter This, is due range of activity funnel also for share the performance share is IC industry-leading stabilized. to of enabled

consistent that discrete market. Our shown has discrete customers the business, with MOSFET for has been published X Tier power year-over-year predominantly what a is decline

New order increasing, this which have customer recovery forecast stabilized market. for signals levels with now a

displays Moving unit. to our sensors and business

we volume imaging expecting are growing next steadily continued microphone of non sensors, First, looking throughout increase the manufacturing our year. MEMS products, at

co-developing While in parallel, platform new offerings.

We development platform products infrared thermal MEMS and radiation remote stages, several and sensors. as such customer speakers, centers have

with sensor, half Crocus is TMR production year wrap magnetic first with Our expected to next activity of sensors. the technology to numerous mass state-of-the-art in

unique our a We're LED front, display capture with OLED and the also micro with accelerated market. the technology. working XD is screens to on On development market Aledia has program large their VR share micro expected for

sensors. imaging to Moving

expect good lead product to according production would our mass in the using to first wafer of results shortly received time-of-flight and production, customer moving we are the very from stacked achieved XXX-millimeter plan start front, backside moving and also have half This very pixel-level our sensors. sensors to for first On our results good bonding manufacturing to illumination be We lens-type sensor fingerprint year. platform. next

We continue to to weakness in the a customer market sensor bond forecast X-ray rebound and sensors. see however, industrial market segments, we for in dental begin sensor industrial see X market, the

fab mentioned. XXXX California, our quarter was X, RT our Third second X-inch factory, XX%; in rate; X-inch factory, utilization the Migdal XX% was layers XX-point as at by Beach, about had XX-inch impacted in we we our cyber X versus at group was the business XX%; utilization; the at X-inch quarter. X, In about increase levels Fab X Fab Foundry Haemek a are Japan, Factory factories factory, was processed Fab XX%. TPSCO in San had Antonio XX% event,

high XX%, photo was And our result for call turn allowing increased hence, utilization continued XXXX demand. as customer of I'd also and the XX% announced capacity Oren, We that, our by the CFO, Shirazi. layer revenue in like over resulting against to expansion. With capability a Oren a the growth previously please. to QX

Oren Shirazi

call. today. XXXX thank results revenue We released us joining and you to And today a quarter our strong for guidance. QX everyone, Welcome, our provided XXXX third

reports, of $XX and report moves balance sale income X.X% the to in the and due million, quarter then $XX or I per only Analyzing share million $XX Since P&L in balance cyber for the third cash to million, to mainly its results, $X.XX months cash the as of or XXXX. tax it. on work the prior tax effective or highlights XXXX, to in Japanese hence, impact financial the and impact lower COGS to lower from which will X no WIP now XXXX, and net financial the the sheet, revenue the per was third we XX, has basic where respectively, in flow event compared the progress reduced XXXX in P&L impacted starts on achieved, compared as profits having million in business asset quarter and lower is and quarter and compared million compared derived already $X.XX the Gross our million, profits make in profit in analyzing diluted per I rate diluted third million factory, lower statements. were respectively, from months tax for line, $XX diluted, due the compared by million $XX wish prior results XXXX XXXX Obviously, our the basic figure disruption, higher sheet and NOLs and an Russell as and our the in the had expense and or Before compared from flow $XX in to implications all-in the income balance respectively have of in $X the share, earnings and than quarter and were quarter resulted profit sheet event. increase XX, quarter operating we share the discuss we quarter of and its utilization, million have Net provide Revenues the $XXX we in X% same could third $XX will of September the the balance ended the on XXXX. XXXX. and X to and factory million sheet. relate and quarter impact comment of in impact as and The of Israel. quarter million as the manufacturing event I the revenues X% and flow XXXX third which margins. to third in to this third X.X% described for generated on lower profit tax cash to for quarter XX% the quarter compared to utilization $XX with, in no XX% P&D as approximately basic as to and and earnings XXXX, in higher and the million caused the September in prior States cash of $X.XX $XX were Israel, ended in $XXX as rate resulted

certain tax in and low X% in received we rate. as the resulted factories tax XXXX, Japanese effective credits resulting The in increase to interest higher amount also in in addition, a In compared XXXX. a all-in revenue XXXX noncontrolling utilization

of in investments. the that for hedging generated will it from we currency we the hedging TPSCo exposure, are operations. over Regarding hedge the our hedging Tower's will expected of would is of The in not currency such impact yen the and the cost a Uozu minority activities. the rate is Japanese a In I against to on rate. enjoy part margins in our additional business revenue yen, cost most significantly yen, hedge transactions natural since to to be exchange to cylinder future, fluctuations In transactions. in may expansion the X of Tower be associated the despite margins capacity compared like vast incremental TPSCo's all limited. describe to majority while X to order remaining Hence, yen revenue relation and majority rights range portion narrow the executed dollar yen denominated Japanese fluctuate, have now mitigate the the spot investment, is are funded as and since fully the our contained cost the increase the

fluctuations. to the relation the on natural extent Japanese Japanese protect balance hedge yen exceed cash we balances have In the addition, cash a to extent sheet, not partially amount. on does to to yen the the helps impact impact potential yen loans from yen amount us due the loan Japanese This of in and

in have are we in our XX% Israeli the currency, Lastly, and have to currency, costs shekel. approximately Israeli no fluctuations this denominated in in liabilities Since shekel we relation currency. denominated some of in the revenues

in exposure a, investing of exposure a engaging to cylinder our We also hedge our portion resulting by, the of NIS large denominated cash risk mitigate transactions from denominated resulting cost shekel to currency currency a cost; Israeli denominated securities liabilities. portion Israeli this from in and X marketable mitigate b, our

financial a balance stable the at present Looking sheet, and position. we strong

cap And $X.XX $X resulting billion. equity ESOP of of Short-term $XX X debt shareholders' as million, diluted billion, Current additional reached current sheet, million totaled asset the outstanding and divided in included XXX related for were payment and of balance paid X.Xx. liabilities relating ordinary generated sheet the third million consists mainly ratio, of a $XX report. count second the assets expansion $XX to operations XXXX, record approximately in was last million million. million million of an was note and our Total in quarter which debenture as million principal next payments assets shares debt fully a cash included months amount Our of by share, to of on share in a XXX quarter is program. CFG, of which defined cash the Investments liabilities. short-term approximately in XXXX. XX-inch during includes be the table balance XX assets, million, Fab capacity $XX In $XX flow to the other fixed $XX from the CapEx compared flow

we third of the during quarter addition, repaid our million debt In of $XX XXXX.

for XXXX, During the of the operations. flow $XXX back mainly And September to cash we million turn CapEx ended call I Invested $XXX now fixed operator. in million months the wish X $XX million Operator? debt. and XX, to paid generated assets,

Operator

[Operator Instructions].

from Company. Needham first The Raji is question of Gill &

Rajvindra Gill

on for strong December. guide Congratulations the

QX? do to QX Are utilization on into of go the gross fall kind the we the cyber there impact and then revenue change Just into any snap rates a cyber through the rates, utilization back XX% expecting incremental on a going the on question we to also, new event. is about the as given think event, how we the profit XX%

the the September? should off sure wanted Just low improve start margin base make in gross to to that

Oren Shirazi

you. Yes. Thank

the same. XX%, in gross the anything already event mentioned, behind like and It's QX. cyber XX%, don't profit margins Our the be model you we on expect from Of impact will any us. or

Russell Ellwanger

in And PAUSE were just necessarily a ramp the utilization the it's is rates, but real. midst We very QX, in of not snapback. the a ramp

utilization good So across should QX. board be in the the very rates

Rajvindra Gill

of year, in an COVID. growth from specific that? economy. increase kind normalized look we the -- then Okay. about in seeing because into organically. increase impact think if you growth, thinking organic how impact rate. curious getting start were rebound happening are markets. in what's curious more to looking growth, thinking we would in of how And you're But those kind into we're growth at about a Great. of of of some we're the the about sequential first had And about a little about segment? next the you're overall describe I'm of when that at segment in sequential how We XX% of markets variety QX year-over-year just the the kind XX% And see an you're center How in smartphone case bit organic data a We organic thinking when then do we going COVID I'm impact. it trends rates to XXXX, of thinking for had you half

Russell Ellwanger

That's this I believe year, end was And script, handsets RFSOI, a XXXX, that very, stated than XXXX revenue be of we're itself the increase and XX%. substantial area over of the we certainly XX%. the that additional at bigger in in the will during projecting specific an very grew. above market percent had it much

where RF be than that a -- XG XX% percentage, themselves indicators XG the that year. very are the of good handsets somewhere next is almost is So lower to top handsets on and sales in that, way between will market content doubling share XX% a higher end explained of higher and only that, can And be all models.

and think the forecasts that, believe, good. the position year. stay it And in well in to growth for appears look infrastructure organic The that extremely to next I will we're good management thing it in continue was power is, and the The that was with the in silicon or continue it headwind and Customer growth be present we've So had, industrial higher. organic good a organic data maybe decrease as growth germanium in a center, maintain strong will, the strong discretes, area. power XG I as rates to appears big sensors. having organic decrease that and to, dental it its at of growth

growth And other organic the the that up deficit X it obviously, we to beyond So well we've numbers for those the had, first make pops markets. on then up say in it. has

industrial really going coming all forecast looking the market discrete be headwind that businesses have would returning that's as research, will the will we now, appear have that stronger. it the that power to some be be That's XXXX been we and With right see indications certainly, sensors, degree And market, backed customer back. going strong that against And by other to well, the -- that up. that results.

So believe it organic be this good. trajectory I than very year, is much for on been stronger year, that next I this it's will a year growth the although think

Rajvindra Gill

And relative we just business growth. QX? the guidance to catch-up we're talked represents at the would looking data about any the think characterize guidance. And increase? makeup smartphone as QX you a Is the of from the of about as How lost when in little well in QX? QX bit to improvement the that QX center growth follow-up, do that how You

Russell Ellwanger

details, QX, XX that's whatever few didn't starts, had revenue. of net, dollars negative but missing because QX positive. a the a of of on cyber of you facilities, we within to I -- a the operations end all of cue of an actually a Certainly, fortunately, and in And the by think all able a that when much QX are or able times. have points not event event that have desire the to days without amount to we getting at quarter the in design, a design, to -- millions ship substrates On impact too event QX, cyber ship into move X safe we're of the you additionally, to inventory where the that to we're by mode stop needed to

manually WIP those you you lot bottlenecks back the build it's the where stations then, when line have moved you've it start a up, you up at that So of nonlinear. and

multiple not because had where it's levels, Fab it had that So put in in the then working no or of the stated optimal safe is of where to not the shut And I their activity position. Fab we script the down weeks you them Fabs, to linear. working longer a

many Now and to on products. need top month you last really have the get the quarter customers of that, that of their

activities, now energy of front line, you're line have the amount end up would in been so another the of in to So back a negative in for quarter. putting the the in upcoming the on that a disruption end huge impact of the order make

negatively positively. higher. been guidance would being would the had no a of the have all event, there million anticipated And on been have the because that $XXX guidance event, stated, we that So net not impacted is

it's to customers, a very having really think our in right being products So attribute strong markets. demand, done a strong with I the is we've what good which

direct we're But think someone really all. thing, in Now the pushout that the good QX. of I not wouldn't case QX It's net, $XXX at a guidance is the I for want to million in the think shape.

Rajvindra Gill

Okay.

have It higher underlying been days it Okay. Got those were was X it and closed if that demand wasn't it, to really right? XX for would that it, down. drove

Russell Ellwanger

X days X linearity compensating of XX non line, disruption. XX of days line on for the the the to to

Operator

Cody question Loop is acree of from next Capital. The

Cody Acree

versus or can carries make that spending looking on how Russell, spending? much off cyber capital on just you spending any And QX operational falls QX? delineation into at in of event, the

Oren Shirazi

moves was inventories September of any event. in the line, to the would didn't was a of on we right? there the days XX event. spending had less there than Cody, week. of because there the obviously, quantity have been end capital of no said, Meaning lost We it the NIS So was like of of XX just or lower in Russell if WIP start have impact an quantity, was

So only And in loss million of dollars. the just impact P&L this P&L. the COGS a line it's a about few

Cody Acree

the just between now you're And to split your is in ramp your Good. just about infrastructure next infrastructure then, expectations germanium mix, you Japan for expect for that silicon year? talk Newport the earlier your in Russell, you Can tell center Okay. and that sitting. Beach ramp for data for and in like, can us you in what XG look

Russell Ellwanger

Japan, Antonio. you believe I Japan, San said it's it's not So but

So this in shape X we what in different San silicon on germanium in how along is run Antonio at very there. our year. Newport San will and be and XXX% platforms our San call not, sure Antonio. Beach in HX good I for and Antonio well next HX qualification, of much point,

have -- We ability probably to Yes. okay. the

San the Antonio you but silicon qualifications their the the down probably germanium. San down it XXXX. driving happened we the very that XXXX, the qualification can of on of internal this point, slowed What end another be as capacity XX% the increase for So brought that's parts not At of was the at throughout enough Antonio. had up a the the question qualifications there. in demand being platform, through of qualifications quick know, But capacity that was we qualified just customer and really customers it's to

capacity to didn't desirous sufficient. future, ensure and a ensure to more but lot just multiple excited very factory Newport Beach minds customers customers qualify fleet within for enough ability there's than at forecast, our of supply to the to hitting short-term that And upsides. are have the in their to was additional So to urgency time, ensure not this

Operator

next of from question The Lipacis is Jefferies. Mark

Mark Lipacis

Japan, of XXX-millimeter the in high and to capacity. utilization in going utilization is facility. in it ahead like in capacity you have So need-to-add the particularly a Russell, rates you've sounds typically past, the the And been be

year. adding, filled half past, that that you're the in by think close the I the to capacity will we'll believe next you be of said you second be

silicon and germanium. -- mentioned you So just the

Like capacity? thinking you maybe opportunities preview? give the does your capacity and versus you are And organic in it like on add just And then? putting what equipment around you review framework just adding to us past can question. about is buying a market can first That's the look like just opportunities? how those new what So inorganic

Russell Ellwanger

I very appreciate the question. a It's That's good big a question. question.

believe organically to there's On needed. we whatever as If it far gray And area have that expanding increase area should into that tools, footprint it's the a San as enough taking germanium it's a X into needs we I the do much XXX-millimeter Antonio. adding silicon even was few side, site, can the there. that reason Beach be that offering wide on we extended Newport expanded and the from is

believe, have we can we'd grow, that we next XXX-millimeter for years. the done, demand XXX-millimeter enough XXX-millimeter I So substantial XXX-millimeter we And footprint think, the factory growth in Japan. a have have a The within is story. big that the different over I

a a XX% stated, of As capacity at we we the utilization it's that that to that had left XX% adding be beyond a after position photo have level QX added right capacity. photo factory model now very not the been have, good in would we

maybe to room to be an QX, QX, QX, next hitting So come next correct, against somewhat But of demand. of we have of grow year. QX QX, ever we'll a increasing you're QX year limit continue even and

you how inorganic for the, moment think will, very be done inorganically. good. does if chessboard the activities? it that on At And must us, looks look So I

Mark Lipacis

other said help those shifting driving driver. a you what's is of are all transceivers you I some emerge side, really can so germanium in starting data center you germanium? that's that's to data speed silicon had. understand you us center -- and optical, and a silicon all Is Can the that growth on your topic, that? then give this the higher And from to And And because us technology Great. where on sense the as are? Okay. share

Russell Ellwanger

believe our somewhere silicon germanium is XX%, sitting about share in I XX%.

where what XxXXX, is volumes centers just continue years, we be that's clear center, sold. were But almost traveling mean, huge. XxXX not information that center to not are there an high over side all going. think The data there selling still it the and of It's -- really I was now, The the must for data on very inventory the our is reason. fully in very XXX, And certainly, really at happened are end, grow. the we I being past at but I sit. which XxXXs whatever parts will data for now higher that it's amount believe a in of is time

it I of it computing think was of just centers XXXX, and just that of computing a even a And So delay was own everything end to back growth there And in capabilities, in for because a happened whatever maybe normal tied market. maybe data that of the but really our certain well, was needed have rate. they of the with themselves and releases overbuy, as the companies' to at the there came new and that overbuy. with customers XXXX, of from some activities parts. caused reason slowdown But that beginning then the release of

Operator

from is Richard question next The Craig-Hallum. Shannon of

Richard Shannon

flat. on in even Are had quarter. related a gross cost percentage there an of here? to a understanding event there sort A the revenues margins question Maybe those the little a step with terms, effect nature down what bit? down cyber in drilled Or some is that onetime some in third other

Oren Shirazi

lower quantity started that issue exactly, right? didn't is WIP onetime -- Yes, run because much and than regular part, we of said created a I So of rate. was the we start the to for started it's XX lower onetime, days event, I there I like less fiber averagely, hope in we this XX mean, because my or the Richard, wafers

So we produced less layers.

amount of XXXX, line. September work of in the there less is in So quantity XX, as process eventually, of there's quantity, less

So obviously, you statement closing. every in over is mathematically cost financial allocate WIP, which done can less

because dollars became million of So the impact. one-time higher few COGS of a by that amount

exclude considerations from should course, included. is or that Of because you this

this onetime that is a million WIP than So a a regular by dollars. lower quarter few in any

Richard Shannon

incremental So you're And that not margin gross about in up going second to should base of quarter that then? this XX% somehow? we mean to catch the but base, quarter Oren, think third does the off therefore, XX% coming that

Oren Shirazi

Yes.

Richard Shannon

the there right. to seeing 'XX? effect for a discretes. talking you're That Is helpful. is Or any Okay. All that about on come question guidance, is in guidance? power forecasts Russell, your improving fourth in quarter fourth in here quarter benefit

Russell Ellwanger

'XX. all I didn't order. forecast, That's in said say I in

customer earliest, so in coming end that would But starts. would that -- for the it it's So snapping forecasts up, be yes, the be QX and at back 'XX. of are the

Richard Shannon

on A RFSOI. Okay. question Fair enough.

share from share coming nice You're year? here. And talking from that some there in seem the very match? competitors pricing gains competitive can't about any to expect very improved are you gaining you this performance mean, strong Or be that gains response Do aspect share here? those is your do -- a I

Russell Ellwanger

Competitive response.

the competition desirous the we that in market dump that isn't within pricing. to have think I that

that's place I deals and think competition really that on So be. it the performance, a that should

road able very be customers able be get technical of to are our tie that meet performance them as ability It's to they to if quickly gains have to think I has always needs And performance. there. shipping to demands them of as aligned on specific what your performance into maps to customer and to be multiple their and the really serve upside because things. you're well

you you have time So ships that as alive technically. customer, and have state, silicon and once can the good them I'll good have on a technical performance. your But keep a map is best it's with But you to always yield. wafer going salesperson road

with the across to to to So And if we've technical, isn't it's need able that the be they big show to move give relationship. part board. I that and something believe it that able our customers been the And way. performance just

the is our But the It's there. most ability advanced XXX-millimeter. growth there's is biggest platforms. So

Richard Shannon

Okay.

expecting that or gain even share So maintain share year? are to those next you --

Russell Ellwanger

And maintain. going at to still expecting certainly look everything -- We're is if revenue I quite forecasts, is substantially. up

'XX than that So gain What how market much over very market clearly I'm is bigger at not that 'XX up 'XX going is had and percentage is this 'XX grew. the just sure revenue much we I the the related state that in of over can to point.

next content share still this many substantial exactly growth gaining we're really to how the at revenue increase forecast, From share. that it until year. for know market what it's be those we being substantial can state that market the talk would can we'd But it's hard -- is little units, So that customer what that I from year. don't be about year. and shared. next you a be sold, I me gaining certainly are But of point a what to driving be units the -- market bit yet only reading, gained next will have will appear share see

Richard Shannon

will You've Oren. be of for we Okay. then CapEx quarter fourth think $XX-plus that next about a the a in my million levels the range about the Excellent. do per in for question and about level quarter. thinking into spending had maybe last seen How we've the to XXXX? should Or And mid-XXs. year? How to get think few Is that? still that back quarters in we

Oren Shirazi

levels still of of still million installed be QX, I mainly we will investments $XXX QX, in Yes. not still. to the be those have and arrived But Uozu, believe those which was paid. even in high QX, in coming we for tools quarter XX-something QX needs like for maybe have QX because and QX, the that

payment that's schedule. on a gradual So

QX believe So the QX, still this. of I will remaining be -- QX

expect quarter. announce one-off. be the addition we I And do. I back to million $XX level expansion, QX, for to mean, other supposed may the $XX which But that to was So nothing from Russell regular there is unless $XX announce million in indicated have approved million model, would additional approved we now, and actually that per

Operator

next from Research. Investment Zacks question Lisa Thompson The of is

Lisa Thompson

one you reaching limits QX year about only of the would and buy next wanted you're capacity ask I I So maybe talking that about something. things of to is guess,

for what to that So announcements as as we happen, is far how going when look should or Or decisions? work? timing as to might things

Russell Ellwanger

but Yes. I you give I could would exact an if I you I honestly be give an to already data, needed publicly could exact wish date, released. have

for would if and we The at that's the have specific I what But to will complete, do very deals? think a be looking always announce. how there's does it was working things it good. looks a when question we're it, does deal look we us, deal was landscape for like on. would And and I So asked

might within organically something this to increase organically ability footprint financially to we but more it option. continue still to be Japan, the stated in As even point, ability have to Japan, the however, Japan always have, previously, inorganically we do the viable that at than in in go organically as sits an

possibly seeing and demand we I gives grow capacity to more but we the to with talking Japan. the Japan. better in I do basis node do a enter QX, nothing time likely an most with that scenario an it's continuing that give that more prefer So capability inorganic make point state this when nominally of to than organically to released. something is into over to to would I would point now a maybe do at indication in and obviously, that to enough this growth the at XXXX, QX decision we're about it's publicly be in next we of have. if That you a where ROI But could granularity, needed wish QX substantially a we'd what we point to

Lisa Thompson

could going today it think you're year? I of next something from not the do until next to possibly meaning interpret end Or So about you even of could the year? as that end to

Russell Ellwanger

next end we do the and of By inorganically year, Japan the investment well have organic either make another to or next before to do end something the decision of year. in

Operator

is The Securities. of next David question Steelhead from Duley

David Duley

are perspective, from Asia. you're what foundry XX-inch seems some the of seeing there. than pricing just X- to foundry? down foundries given It normally seeing you have does capacity less overall increase I'm and ability full a And X-inch macro or capacity tight raised fairly the pricing you're and seeing Are is it in like the wondering throughout both you XX-inch pricing. there go

Russell Ellwanger

really We seen haven't in pricing pressure XX-inch.

we've thing, technologies maintain a as a On years, in in selling ASP, per for price new position and company-blended multiple XX-inch a stated, the for platforms. X-inch layer always ramp past itself, a average and being introducing stable to new that and X good been years. that's However, we've been able

always good that is have reset out ASP reduction to the even higher, level and a there's the and platforms price new some we more curve but that's over year-over-year on new chips level The the platforms, same with maintain Now can ability by capability platform time, greater customer higher that maybe both. putting the to sometimes the has a previous wafer. a as benefit efficiency one get previous per or so you that to

the to way And a that's think So always best go. win-win. it's I that,

with I prices will ever capacity crunch. because raise customer, believe customers and don't never have raised We yet any we of a for prices

as that from I think good the us, that, to to that's eliminate to customers prices supplier, can supplier everything them. we unilaterally and had big we've trust. The one very customers same a done material starting lose and way very, we lose a raise entire for the supply

somebody when So model right to have a I go. that is use way you hurt very to their position to think business in not the crunch

developing very company through don't and So multiple don't years. been able to, as no, good new maintain as we least I'm for we long not at have throughout ever I believe raise the partnership prices. But we And that will, here. ASP a platforms,

David Duley

what you overall far that of could -- QX about? largest talk a be at Okay. buckets you've what in as segments take as your And levels your you then stab you revenue the the XXXX, guidance, your given calendar think now that would

Russell Ellwanger

to are the areas. pretty think different do much granular we've how been the I I'll mean, that at on of the year. as growth I there end

we maybe But could we'll so by very just as you give that. calculate once off on a product the year it give of detailed. group actual And breakdown, last really year and

give QX end year, the those at of when all So numbers. of release we we'll the

David Duley

Okay. me. And then for final question

business do nicely The next is to just will do several pretty going is good to look year. large business grow these sort Just range of the seems of buckets sectors next year. seems given us grow on of review. target it now strong? year it's And the a can sounds next It same. is growth trajectory we strong like you grow But might germanium ramp you a power what of share going about all silicon wondering, see major kind little for or nicely year. expectations management a It being bit the what like like you of for the RFSOI your XX%? Or can with with might that think some next you fairly XX% I'm have

Russell Ellwanger

back areas year, tonight, next stronger rate or that that's grown headwinds the have this some And to going call extent. that release this that at to we're I extent we a to same the QX see believe in forecast the we coming call, see growing XXXX stated year. the we

that this year. increased next or the organic year had I reason we've So any there's don't think numbers for maintained be couldn't

Operator

are There you Mr. statement? concluding this time. to no at Ellwanger, questions like your would make further

Russell Ellwanger

call. in again, of cover Thank very, in much. your Certainly. a everybody RF good much. appreciate summary, you experiencing very I'm the for very all I is us analysts Thank strong company grateful thank the it. Well, today, you I very demand. so surge the questions industry that In for, participating for the interest in and

content that faster as automotive XXXX, to in As in growth sales double infrastructure, slowdown handsets and in rebound a sales is accelerating. the beginning years the is put in ramping, XG-enabled even automotive expected in questions overall XXXX handsets the markets. a after market handset XG. were markets, increase is content vehicles, recovery grow expected XXXX, market to and XXXX are the in XG to consider XXXX our the more the rate. nearly of past content, which include as adoption strong new Power from with a in Unlike COVID-XX both increase of is handsets models high should the at a industrial of year And in and XX% well were we'll or handset as to as stronger anticipated adoption at rebounding from are electrical handsets, COVID-XX, anticipate XXXX year down RF beyond in unit to be versus expected an Analysts stated market we the and slowdown both even growth in and enjoy are XXXX. see discrete, RF whole. for rebound us the handset of growth. believe, good the If a on growth over I because due IC forecasted supply should good, RF X position asked, well XG least a gain top very questions well part and that share be our

our demanding We COVID-XX and industrial and a for in situation market what see strong recovery X-ray XXXX. to supported in a due strongly and customer rebound And by demand very customers' experienced expect strong backed of and Considering market. XXXX, based inputs the have mean, pandemic industrial high market a we growth. I to the in research. We strong, they're due dental look market on signs sensors geopolitical to for XXXX slowdown in by by to forecast this a very research, situation forward sensor market

platforms. recent The So with the developments direct presenters started is Analog topics about that but stating, learn really premier offerings. website. timing and TGS the event seminars event. access format, of week, less of benefit our our Symposium All sign on easier the are Other does presented more specific more solutions, this event company's traditional my venue Similar Global and company's than platforms across of the Annual technologies, online a to series the leading online interact information of or and we all is about the well, consists our of and up of website, webinars, venue conclude are XXXX and to our team Technology on experts, the information the the presenting manufacturing by comments. webinars specific online added Tower's our with the virtual,

big strong it And can wish. fact as you the be there's that So these. it's of very attendance virtual, as

up. to sign So and at invited everyone these is look

you season. on holiday much. we thank conference. Strum really, will Virtual at you represent very November Dr. health, say peace, Crédit everybody, very With as the I Suisse In Avi Thank and the much. company Wish Dr. Marco addition, happiness XXXX, into Racanelli and the head security, XX, that,

Operator

for Quarter This concludes call. Tower you. Thank Semiconductor Thank you the participation. Results Third Conference your XXXX

may You disconnect. go ahead and

Tower Semiconductor (TSEM) 12 Nov 202020 Q3 Earnings call transcript